Why not build a Philippine brand of coconut water

We welcome the recent announcement of the President that two leading US beverage companies will be investing in the coconut water industry for marketing and distribution in the United States.

However, perhaps we should ask if there is a long-term strategic arrangement that could be more advantageous to our country and our people than simply being a grower and supplier for foreign brands, especially if those brands also source from other coconut-producing countries in Latin America, Indian Ocean and Southeast Asia.

Why not build our own brand of coconut water? We know by now that people don’t buy products; they buy brands, so ultimately the real value of a business lies in its brand name or trademark and less so in the raw materials or ingredients which tend to be commoditized, or in the building and equipment which can be eventually outsourced (think Nike which owns no shoe factory). This is especially true in the case of consumer goods like beverages. A good example we can learn from is the state of our sugar industry, which has been supplying for decades to the world’s most valuable beverage brands, yet today our farmers continue to languish at the mercy of world commodity prices.

No PH global brand

It is lamentable that in today’s global marketplace, the Philippines still cannot boast of any major branded export product or truly global brand name that is marketed to the world’s 7 billion people—not just to our own 10 million OFWs. Cynics may say but we do have an export—OFWs—but people are a nation’s strongest asset and a country’s greatest wealth who must be protected, not exploited.

Hopefully, our own brand of coconut water can revitalize our coconut industry on which depend 25 million Filipinos, and pave the way for marketing other products of nature, eventually minimizing the diaspora of talented OFWs who suffer incalculable social costs of separation from family and relatives.

Country as origin

Provenance is a key differentiator and major competitive edge for many products and services. Perhaps we can learn from those countries who were clever enough to invest in building and marketing their own brands of food and beverages, even fashion, in the process, creating a strong favorable image of their culture and countries as the original source of premium high quality products, transforming traditionally low-value agriculture into multibillion dollar businesses—Alaskan salmon and Boston lobster, Swiss chocolate and cheese, French brandy and wine, Russian vodka and Scotch whisky, Irish stout and London gin, German beer and Italian olives, Portuguese sardines and Spanish chorizos, Canadian maple syrup, Mexican tequila and Jamaican rhum, Kenyan coffee and Hawaiian macadamia, Brazilian acai berry and Cuban cigar, Australian dairy products and New Zealand kiwi, Chinese tea and Japanese sake, Korean kimchi and ginseng, Kashmir wool and Indian curry, Indonesian spices and Malaysian palm, Thai rice and Vietnamese pho, California oranges and Washington apples, ad infinitum.

An archipelagic advantage

More important than the fact that the Philippines is the world’s largest producer of coconuts, experts have concluded that the Philippine coconut variety arguably tastes the most delicious in the world. Scientists at the Philippine Coconut Authority explain this is due to our country’s unique geography as an archipelago. An archipelago allows for the best growing conditions due to the natural wind patterns and sea currents that cross ventilate our 7,107 islands which then combine with an ideal tropical climate and suitable sandy soil to produce the world’s best-tasting fresh coconuts. Apparently, the best fertilizer for coconuts is salt, which abounds in our oceans. What has been perceived as a handicap and blamed for our disunity as a nation—our archipelago—is in fact a God-given gift. This unique selling point and proprietary advantage that yields a superior coconut represents a compelling argument for creating our own brand of coconut water and other coconut by-products, which can then be exploited in our communications. Since foreign brands diversify their sourcing of raw materials, it is unlikely that they would promote the Philippines as the source of superior coconuts because that would undermine their alternative sources. This has been manifested in past attempts by some foreigners to grow our local coconut varieties on their own soil, but still failing to achieve the same deliciously sweetish “buko juice.”

Local before global

Coconut water is the world’s best sports drink loaded with electrolytes like sodium, potassium and magnesium while cleansing the kidney, but adequate product supply remains a serious constraint. So should we not prioritize local consumers before exporting overseas, at least until after newly planted trees start to bear fruit in five years? Prioritizing the local market maximizes our intimate knowledge of local market conditions and minimizes the cost of transportation, helping us generate revenue and profits to fuel future global expansion. After all, the Philippines is the world’s 12th largest country with 100 million consumers living in a tropical climate and consuming non-alcoholic beverages that reach an estimated retail value of P300 billion. It is no surprise that the largest food and beverage multinationals rank their subsidiaries in the Philippines among their top ten markets. Not only is the fresh young coconut (up to five months) a source of healthy drink, but its white meat is also a rich source of nutrition for our growing population. Instead of buying a manmade beverage containing artificial preservatives that sell for P30 per 500 ml, the lowly “buko juice”—at P20 per coconut containing more than 500 ml is quite a bargain.  Not only do profits remain onshore, but they can be reinvested into the local economy instead of repatriated abroad.  It can even provide livelihood for the urban poor who can be deputized as buko juice vendors, as some NGOs like the Balik Probinsiya movement are trying to organize.

Natural drink, national drink

One can even argue we need not compete only against sports drinks because it can serve the purpose of a multi-purpose beverage—for daily refreshment and regular hydration, dining accompaniment and indulgent relaxation, and even served proudly at state banquets, instead of European wine.  Beyond coconut water, it is “buko juice”; beyond just a sports drink, it must be our “National Drink.” While man invented soda and artificial packaging, God created only one natural drink in natural packaging (whose husk can be used as feedstock for biofuel, a renewable energy)—a 100-perfect natural drink that is as delicious and refreshing as it is healthy and nutritious—of which we have the biggest supply and the best variety.

Organizing the industry

What the government must do, through the Philippine Coconut Authority, is to organize farmers throughout the archipelago to begin massive and intensive planting and to ensure best growing practices among farmers to guarantee the highest quality and quantity with consistency and efficiency. In the process, let us please not repeat the mistakes of our mis-administration of coconut and sugar. Simultaneously, DOST can work on a technology which can harvest and package coconut water that can extend shelf life without the heating that destroys nutrients and affects taste, or adding preservatives.

The government can also provide fiscal incentives for the country’s “agri-preneurs” to reinvest in the coconut industry and encourage multibillion-peso local drink companies to build a globally competitive brand of “buko juice.” One potentially credible spokesperson who enjoys worldwide fame as an athlete is  Representative Pacquiao—imagine an advertising campaign showing the world’s best “pound-for-pound boxer” drinking and endorsing the world’s best “pound-for-pound beverage.” This will directly help his constituency since coconut is a chief source of livelihood for Sarangani and General Santos City.

Exports and tourism

Launching and building our own brand of coconut water can pave the way for promoting “Brand Philippines” as a source of higher-value products from mother nature such as the world’s most delicious mangoes, biggest bananas and sweetest pineapples, organic crops, fresh seafood and marine products, including even the rare golden South Sea pearl grown only in pristine Palawan. All these will not only help develop our agricultural sector and enrich farmers and fishermen, but drive our tourism efforts. Branded exports of our agricultural products and a tourism campaign promoting our natural beauty can mutually reinforce each other to build a distinctive image for “Brand Philippines” as a country with God-made wonders and manmade warmth. Our “welcome drink” for foreigners? Buko juice, naturally.

(The writer is founder and president of Brand Mentors Inc., a marketing and advertising consultancy firm whose mission is to help Filipino companies grow, and help local brands win in a competitive global economy. He has 30 years of experience working throughout the Asia-Pacific region with multinationals and local conglomerates. He is the author of “Marketing and Advertising with a Conscience.” E-mail him at [email protected].)